Employer communications with putative class members struck down

With the prolific numbers of wage and hour class action cases being filed in California, employers often seek ways to minimize their participation and reduce potential liability. In one case, an employer sought to obtain individual releases in exchange for a substantial monetary payment and also sought to require new employment agreements that included an individual arbitration obligation (and class/collective action waiver) as a condition of continued employment. As detailed below, the employer overstepped its boundaries, and the efforts were curtailed by the court.

Factual background

Lorenzo Dominguez was employed as an underwriter by Better Mortgage Corporation. He filed a wage and hour lawsuit, asserting the employer improperly failed to pay overtime to all mortgage underwriters it employed. The lawsuit was filed in federal court and brought collective action claims under the federal Fair Labor Standards Act (FLSA), as well as class claims under California’s state wage and hour laws.